Maintaining Balance

by Jay Grant On Apr 1, 2006

Why should a builder developer from anywhere outside of the New Jersey tri-state area care about a new law called the N.J. Highlands Water Protection and Planning Act? You should care because NIMBYs and environmentalists in your hometown will surely be tracking the results of this law that removed 400,000 acres from development in a four-county area, and threatens to remove an additional 400,000 acres without compensating land owners for their property rights.

Before digesting this law’s impact, a short history of the state’s involvement in thwarting both residential and commercial construction is required.

In the mid-1990s, then Gov. Christie Whitman’s administration passed the largest open-space funding initiative in our state’s history by asking voters to approve a $1 billion open-space fund. Voters overwhelmingly approved it, and many other open-space funds were subsequently created on the county and local levels. Over the next 10 years, the political machinery at the local, county and state levels revved up and acquired land and the development rights to property throughout New Jersey, spending approximately $100 million per year for 10 consecutive years.

In 2004, then Gov. McGreevy’s administration created and passed the largest state initiative to stop development in “environmentally sensitive areas” by mandating that more than 400,000 acres of privately owned land be restricted from development in the Highlands regions.

There is a direct correlation between open-space initiatives and anti-development laws, and environmentalists who point to every new project as an immediate and long-term detriment to the ecosystem, as is the case with the Highlands Act, the aquifers and the state’s drinking water. However, not much press is given to highlight ever-increasing land prices and the subsequent dramatic rise in housing prices.

The costs of regulations are passed on to consumers. In the past 20 years, regulations took huge swaths of land off the rolls for potential development. The state’s efforts to preserve land in New Jersey resulted in a huge reduction in home building activity. The region now faces a severe housing shortage, especially for modest-income families.

Property owners are beginning to realize that the land value they once counted on was lost when the opportunity to develop it for housing or business uses was taken away. Further economic impact of no-growth development policies reinforces the reality that fewer taxpayers bear the burden of increasing costs of maintaining government and the services it provides. Therefore, property values, taxes and housing costs continue to rise.

Like the impact of HMOs on the medical field, the pendulum has swung too far with excessive regulations and no-growth measures. Voters and officials need to recognize that, while maintaining an environmentally safe ecosystem must be an ongoing priority for our government, anti-development rules and regulations are some of the primary causes of the rising property tax problem. The solution is striking a balance between the true needs of the environment and the needs of the people for an ongoing supply of new housing, as well as the positive impact new homes have had and should continue to have on your local economy.

The evolution of open-space funding and anti-development laws is taking a real bite out of builders’ livelihoods here in New Jersey. Be alert to similar patterns in your community and be willing to vocalize the need to balance property rights and development with the environment.